Backpage co-founder Michael Lacey and wife Jill Anderson leave the federal courthouse in Phoenix April 13, 2018. He was released from federal custody while awaiting trial on prostitution and money-laundering charges. Thomas Hawthorne/azcentral.com

Backpage co-founder Michael Lacey walks out of the Sandra Day O'Connor Federal Courthouse in Phoenix on April 13, 2018.(Photo: Tom Tingle/The Republic)

Michael Lacey, the co-founder of Backpage.com, has been released from federal custody while awaiting trial on multiple charges that the classified advertising website facilitated prostitution and that executives laundered the lucrative proceeds.

Lacey posted the $1 million bond set Friday morning by a federal judge.

Under conditions of his release, Lacey is subject electronic monitoring. He also had to post two of his properties as surety. It was not clear in the hearing which properties those were.

Lacey walked out of the federal courthouse in downtown Phoenix at about noon. He wore a black T-shirt and jeans. He gave a thumbs-up to a reporter and said, "OK," when asked how he was doing.

Backpage.com co-founder Michael Lacey and his wife, Jill Anderson, walk out of the Sandra Day O’Connor Federal Courthouse in Phoenix on April 13, 2018.(Photo: Tom Tingle/The Republic)

Lacey, 69, appeared at the bond hearing Friday morning in Phoenix clad in black and white stripes and no handcuffs. He gave a series of brief answers – “I do, your honor," “No, your honor” – while U.S. District Magistrate Judge Bridget Bade walked him through the conditions of his release.

Lacey also had to surrender his passport. But an attorney for Lacey, Janey Henze Cook, said in court that the passport was already in the custody of FBI agents who seized it during a raid on Lacey’s property.

James Larkin, also co-founder of Backpage, faces similar charges. He is scheduled for a detention hearing Monday.

On Thursday, the government announced that Carl Ferrer, the former CEO of Backpage, pleaded guilty to similar charges of facilitating prostitution and money laundering. Ferrer admitted in his plea agreement that the website was designed to be used to enable prostitution transactions. He also said in the agreement that the website created procedures to moderate and monitor ads to give a veneer of deniability that Backpage executives knew how the site was being used.

Backpage started in 2004, bringing the classified advertising found in New Times, including the ads sold for a premium on the literal back page of the tabloid, into cyberspace. Lacey founded New Times and Larkin was its publisher.

It was Ferrer who prodded Lacey and Larkin to create Backpage, according to a U.S. Senate report into Backpage activities.

The website started out being populated by the ads that ran in the newspapers, but soon came to be dominated by adult ads. According to a U.S. Senate report, more than 90 percent of the site’s revenue was provided by the adult ads, including racy ones for “escort” services, by 2011.

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IndyStar columnist Tim Swarens spent more than a year investigating a lucrative business where abused children are bought and sold.
USA TODAY